News and Media Releases

24 Feb 2014

Shell has signed an agreement with the UK Government to progress the Peterhead Carbon Capture and Storage (CCS) project to the next phase of design.

The project, led by Shell, with strategic support from SSE, owners of the Peterhead gas power station in Aberdeenshire, aims to capture 10 million tonnes of CO2 over 10 years. This will generate enough clean electricity to power the equivalent of 500,000 homes a year. If successful, the project will represent the first industrial-scale application of CCS technology at a gas power station anywhere in the world.

”The signing of this agreement is a hugely important step towards the UK delivering the world’s first CCS demonstration facility on a gas-fired power station. The project has the potential to make gas, already the cleanest burning fossil fuel, even cleaner,” said Ed Daniels, Chairman of Shell UK. “CCS could be critical to reducing carbon emissions at a time of growing global demand for energy. The successful demonstration of the technology at Peterhead would be a step towards proving its commercial viability as a tool for mitigating climate change. It could also help diversify the North Sea oil and gas industry ­ and so contribute to the sector’s long-term commercial health.”

“SSE is proud to be working with Shell on proposals to install this cutting-edge technology at our Peterhead plant,” said Paul Smith, Managing Director, Generation, SSE. “CCS could play a major role in ensuring secure, low carbon energy in the future and we are pleased to be playing our part in its development"

The proposed initiative at Peterhead is part of a portfolio of major CCS projects supported by Shell. Others include the Quest oil sands project in Alberta, Canada, and the Gorgon project in Australia.

The agreement signed by Ed Davey, Secretary of State for Energy and Climate Change, at Shell’s offices in Aberdeen today, marks the start of a period of Front-End Engineering and Design (FEED), which is expected to continue until 2015. Subject to positive final investment decisions by Shell and the UK Government and the receipt of all relevant consents and permits, the project is expected to be up and running by the end of the decade.

ENQUIRIES:

Notes to Editors

Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 70 countries and territories with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects. For further information, visit www.shell.com

About CCS

500,000 homes is roughly equivalent to all the homes in Edinburgh and Glasgow combined. This is based on DECC data on domestic energy consumption and the following calculations from the project:

The Peterhead CCS Project is part of the UK Government’s CCS Commercialisation Competition and in March 2013 was shortlisted as one of the two preferred projects bidding for funding.

CCS is a process that captures carbon dioxide emissions from large industrial sources, like power stations, smelters and many other industrial sites. Once captured, the CO2 is transported, typically by pipelines, before being permanently stored in deep, underground formations such as depleted oil and gas reservoirs.

The individual components of CCS technology are well understood, tried and tested in many areas across the industry for several decades. Bringing these elements together into a full-chain CCS process on gas is what the Peterhead project proposes to do.

CAPTURE ­– The Peterhead CCS project is based on post-combustion capture and will use amines to absorb the CO2, a method that has been used by the industry for around 50 years. It is therefore a mature and cost-effective solution. It has already been demonstrated as feasible, having been deployed in several small installations in the USA and it is recognised as the best available technology for post-combustion CO2 capture.

TRANSPORT – Following feasibility studies on a variety of options, Shell proposes to build a short length of new pipeline from Peterhead Power Station and link this into the existing offshore pipeline from St Fergus to the Goldeneye reservoir, approximately 12 miles (20 KM) from shore.

STORAGE – CO2 will be stored in the depleted Goldeneye reservoir, which lies about 62 miles (100 KM) from the shore in the outer Moray Firth, and 2.5km beneath the seabed. The reservoir has the key geological features necessary for storing CO2 permanently: a body of high-quality porous rock overlain by impermeable rock to seal the CO2 in place. Goldeneye was a producing gas field from 2004 to 2011. Injection is the reverse of production: during production, natural gas was drawn from the rock and naturally replaced by salt water; injection of CO2 will drive the salt water back out of the store and into the adjacent rock formations from whence it came. The Goldeneye gas store will be monitored throughout its life.

EMPLOYMENT – While most of the infrastructure for the project is already in place, construction is expected to create between 100 and 150 jobs. When operational, the proposed project is expected to support 20 to 30 jobs over a ten-year period.